60second interview

Face to face | 13 October 2016

Andrew England, director and head of strategy at iGTB, tells TFR that banks are sprucing up their legacy systems, partnering with fintechs and redefining trade as part of a new user journey

How do you see the broadening out of the trade finance and cash management landscape into the fintech space?

It is playing out as banks review whether they want to build or buy trade and cash solutions going forwards. Clearly they are adjusting and are more prepared to buy from or partner with fintechs than build in-house. They are looking at the architecture of their banking infrastructure, how good their application programming interface (API) technology is and how it can be used to link to specialist niche players to bring capabilities and products to clients more quickly. It is not an easy process and is a challenge for banks.

Banks have been building proprietary systems but don't they need to get away from these?

Yes, they have hitherto created good proprietary technology - but it has mirrored the historical organisation, so as those organisations have evolved the pre-existing technology has begun to fall short of meeting current needs. Most large banks talk about 'centrification' and are getting rid of multiple systems and making significant investments in reengineering the platforms that served them well in a previous life. They are simplifying accounting systems and extracting the key elements of liquidity management and information provision to create core technology assets that will always be used in the business.

Should banks be worried about fintechs?

I do not believe that fintechs want to take over the role of banks - they are far more niche in terms of objective and origin and cannot penetrate a history of relationships where banks have built up decades of knowledge and credibility with their clients. Apart from the multiplicity of their assets and product offerings, banks cover areas that fintechs are just not interested in, such as capital markets, traditional trade finance, long-term and structured lending and providing core accounts.

Where are the areas of partnership concentrated?

While there are a lot of conversations around risk appetite, currently partnership activity is concentrated around working capital provision.

In the card industry we have seen collaboration in the areas of message formatting and networks and linking-up to other financial institutions. SWIFT is re-evaluating where it plays going forward - and rather like the banks, SWIFT has a robust infrastructure and it takes a lot of heavy lifting to do what SWIFT does.

Do you have some examples of collaboration?

We did work with an Indian corporate in the supply chain area to provide vehicle financing. The distributors had to manage the gap between when the suppliers need funds and when they get paid by the end individual. We developed a supply chain finance capability which enabled a para financial institution to develop an asset book. In addition, we have been working closely with a bank in central Europe who are investing in new trade technology, looking at how they can compete with the more established Austrian banks that finance imports and exports in Central and Eastern Europe.

What do you think are the main themes of Sibos?

Risk, compliance, fraud and where you can play in the digital space. We are hoping for more focus around real-time payments, and 'contextual' banking that makes use of artificial intelligence technology. We develop user journeys - where does the customer come in, what do they want and how do
you as a provider fulfil that journey?

We are looking at the open web, at unstructured data and how to use enhanced technology to extract relevant information for banks when they do a scan on a customer for checks.

There is a lot of gloom and doom about trade and how banks are getting out. What is your perspective?

The official view is that trade in goods and services is growing at rate of GDP, but in Germany 70% of the economy is services and I think how we define trade will change - it's no longer just merchandise. The explosion of data moving across borders is game changing and, because of this data shift, the way in which we define 'goods and services' is being reconstructed before us.

Andrew England is director and head of strategy at iGTB

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